ICICI to reduce interest rates in New Year
By Joseph Samson
Dec 30, 2008
Print    Email    RSS   

India's largest private sector lender, ICICI Bank is finally set for a rate cut. The bank is likely to announce an across the board interest rate cut by 50 to 100 basis points. In fact a senior official from the bank confirmed that the rate cut will be declared "very soon".

At the same time the banker also told that his bank will not reduce the interest rates in stages. "Whatever reduction they go in for, it will be at one go," he said.

The rate cut of ICICI will be valid in all its portfolios and it is expected to make the home loans and auto loans available at cheaper rates from the New Year. Currently the home loan rates of the bank stand around 11.5% to 12.25% and15.5% for floating and fixed rates respectively. The auto loans are being offered at nearly 15%. The prime lending rate (PLR) of ICICI is mounting at14.25% which is around 200 basis points higher than the PLR of most public sector banks.

Following RBI's announcement of rate cut, most banks started deducting their interest rates. Leading the league was Union Bank of India which decreased its PLR by 75 basis points to 12.5%.Among the private lender HDFC reduced its PLR by 50 basis points to 16% but the reduction came into effect under two stages of 25 basis points each from December 15th and January 1st.

The reduction in case of ICICI also comes in the backdrop of RBI's cut in the repo and reverse repo rate earlier this month. The bank had been following a wait and watch before announcing a final cut in its interest rates. During this year, the bank has witnessed a growth of around 5% in its retail business where as its corporate business has grown at a rate of 10% to15%.

Although the corporate business of the bank is less than half of its retail business, the segment has shown substantial growth in comparison to the retail business. As result of this there are rumours that bank will focus more in its corporate business. However the bank refuses to this view and says that says there is no plan to give less attention to retail business.


(Comments Posted : 0) Post Your Comments
Show All Comments
 Select a product:

 Select a product:

Tax Deduction on HRA (House Rent Allowance)
Prepayment on loans: 'To do or not to do'
Property: A good investment option to...
Factors to Evaluate before opting for Home...
Carnival of Indian Personal Finance Blogs #3

PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive